Below are excerpts from the Department of Justice's United States Attorney's Manual addressing collection policies relating to debts owed to the Federal Government and how the DOJ collects debts purportedly "due and owing." Please review here and don't hesitate to contact us if you are facing or about to face a past-due SBA debt.
3-10.500Enforced CollectionsWhen a debtor fails to respond to the post-judgment demand letter or to cure a default on the terms of an established payment plan, immediate steps shall be taken to initiate enforced collection proceedings. The rights and remedies available to the United States, and exemptions available to the debtor, under the Federal Debt Collection Procedures Act, 28 U.S.C. §§3001-3308, should be considered in determining the most efficient and effective means to satisfy the judgment.3-10.510Discovery to determine ability to payFull use shall be made of those discovery methods provided for in the Federal Rules of Civil Procedure whenever financial information is not voluntarily provided by the debtor. If the debtor fails to respond to such discovery requests, those sanctions provided for under the Federal Rules of Civil Procedure shall be pursued promptly and vigorously. All financial information which is obtained through discovery shall be thoroughly reviewed and a determination made on how to proceed to enforce the judgment.3-10.530OffsetOffset of a debtor's federal tax return, federal salary, or federal administrative benefit should be undertaken whenever permitted by law.3-10.540Depriving Debtors of Their ResidenceApproval of the United States Attorney should be obtained prior to executing upon a debtor's residence. Normally, execution on a debtor's residence should not be made if the debtor is cooperative and making reasonable efforts to satisfy the judgment. Similarly, execution upon the debtor's personal or real property should not result in the debtor's family becoming a public charge.
If you are struggling with circumstances that involve SBA loan default or a DOT collection action, you deserve professional help! Our attorneys know how to handle SBA OIC and/or DOT collection cases. If you contact us, we can help you settle SBA debt or your DOT collection problem once and for all. After you schedule an appointment, you confer with a dedicated SBA OIC attorney and Federally Authorized DOT Practitioner who can help you through your administrative legal battle. After your claim is resolved, you never again have to worry about your SBA loan default problem or DOT collection problem haunting you. Our team of lawyers has assisted many clients through the years. Now it is your turn! You truly can settle SBA debt for good!
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Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure
Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements
Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.
Clients executed personal and corporate guarantees for an SBA 7(a) loan from a Preferred Lender Provider (PLP). The borrower corporation defaulted on the loan exposing all collateral pledged by the Clients. The SBA subsequently acquired the loan balance from the PLP, including the right to collect against all guarantors. The SBA sent the Official Pre-Referral Notice to the guarantors giving them sixty (60) days to either pay the outstanding balance in full, negotiate a Repayment (Offer in Compromise (OIC) or Structured Workout (SW)), challenge their alleged guarantor liability or file a Request for Hearing (Appeals Petition) with the SBA Office of Hearings & Appeals.
Because the Clients were not financially eligible for an OIC, they opted for Structured Workout negotiations directly with the SBA before the debt was transferred to the Bureau of Fiscal Service, a division of the U.S. Department of Treasury for enforced collection.
The Firm was hired to negotiate a global Workout Agreement directly with the SBA to resolve the personal and corporate guarantees. After submitting the Structured Workout proposal, the assigned SBA Loan Specialist approved the requested terms in under ten (10) days without any lengthy back and forth negotiations.
The favorable terms of the Workout included an extended maturity at an affordable principal amount, along with a significantly reduced interest rate saving the Clients approximately $181,000 in administrative fees, penalties and interest (contract interest rate and Current Value of Funds Rate (CVFR)) as authorized by 31 U.S.C. § 3717(e) had the SBA loan been transferred to BFS.
Our firm successfully facilitated the SBA settlement of a COVID-19 Economic Injury Disaster Loan (EIDL) where borrower received an SBA disaster loan of $150,000, but due to the severe economic impact of the COVID-19 pandemic, the business was unable to recover.
Despite the borrower’s efforts to maintain operations, shutdowns and restrictions significantly reduced the customer base and revenue, making continued operations unsustainable. After a thorough business closure review, we negotiated with the SBA, securing a resolution where the borrower paid only $6,015 to release the collateral, with no further financial liability for the owner/officer.
This case demonstrates how businesses affected by the pandemic can navigate SBA loan settlements effectively. If your business is struggling with an SBA EIDL loan, we specialize in SBA Offer in Compromise (SBA OIC) solutions to help close outstanding debts while minimizing financial burden.
Clients personally guaranteed an SBA 504 loan balance of $337,000. The Third Party Lender had obtained a Judgment against the clients. We represented clients before the SBA and negotiated an SBA OIC that was accepted for $30,000.
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